In a sign of growing strains between the world's two biggest powers, President Joe Biden signed an executive order Wednesday that would block and regulate high-tech U.S.-based investments going toward China. It covers advanced computer chips, micro electronics, quantum information technologies and artificial intelligence.
Senior administration officials said that the effort stemmed from national security goals, rather than economic interests and that the categories it covered were narrow in scope. The order seeks to blunt China's ability to use U.S. investments in its technology companies to upgrade its military while also preserving broader levels of trade that are vital for both nations' economies.
The United States and China appear to be increasingly locked in a geopolitical competition, along with their deep trade relationship as the world's two largest economies. Biden administration officials have insisted that they have no interest in “decoupling” from China, yet the U.S. has limited the export of advanced computer chips, sought to limit investments into China and kept the expanded tariffs set up by President Donald Trump.
Biden has suggested that China's economy is struggling and its global ambitions have been tempered as the U.S. has reenergized its alliances with Japan, South Korea, Australia and the European Union. The administration consulted with allies and industry in shaping the executive order.
“Worry about China, but don’t worry about China,” Biden told donors at a June fundraising event in California.
The officials previewing the order said that China has exploited U.S. investments to support the development of weapons and modernize its military. The new limits would complement the export controls on advanced computer chips that were announced last year. The Treasury Department, which would monitor the investments, will announce a proposed rulemaking with definitions that would conform to the presidential order and go through a public comment process.
The issue is also a bipartisan priority. In July by a vote of 91-6, the Senate added as an amendment to the National Defense Authorization Act requirements to monitor and limit investments in countries of concern, including China.
Biden has called Chinese President Xi Jinping a “dictator” in the aftermath of the U.S. shooting down a spy balloon from China that floated over the United States. Taiwan's status has been a source of tension, with Biden saying that China had become coercive regarding its independence.
China has supported Russia after its 2022 invasion of Ukraine, though Biden has noted that the friendship has not extended to the shipment of weapons.
U.S. officials have long signaled the coming executive order on investing in China, but it's unclear whether financial markets will regard it as a tapered step or a continued escalation of tensions at a fragile moment.
“The message it sends to the market may be far more decisive,” said Elaine Dezenski, a senior director at the Foundation for Defense of Democracies. "U.S. and multinational companies are already reexamining the risks of investing in China. Beijing’s so-called ‘national security’ and ‘anti-espionage’ laws that curb routine and necessary corporate due diligence and compliance were already having a chilling effect on U.S. foreign direct investment. That chilling now risks turning into a deep freeze.”
China's strong economic growth has stumbled coming out of pandemic lockdowns. On Wednesday, its National Bureau of Statistics reported a 0.3% decline in consumer prices in July from a year ago. That level of deflation points to a lack of consumer demand in China that could hamper growth.
Separately, foreign direct investment into China fell 89% from a year earlier in the second quarter of this year to $4.9 billion, according to data released by the State Administration of Foreign Exchange.
Most foreign investment is believed to be brought in by Chinese companies and disguised as foreign money to get tax breaks and other benefits, according to Chinese researchers.
However, foreign business groups say global companies also are shifting investment plans to other economies.
Foreign companies have lost confidence in China following tighter security controls and a lack of action on reform promises. Calls by President Xi and other leaders for more economic self-reliance have left investors uneasy about their future in the state-dominated economy.
AP reporter Joe McDonald contributed to this report from Beijing.
© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
35 Comments
EFD
Good!
The Chinese economy couldn’t synthesize a fart in a bean factory.
What it can do is steal intellectual property and technology and use it to destroy democracy.
One of the biggest mistakes of the Clinton administration was giving the Chinese access to “commercial” rocket technology, which they promptly used to increase the reliant accuracy of their ICBMs.
And economically, this measure along with falling exports, a falling currency and deflation, will knock the Chinese economy down a notch which will also have the effect of putting a muzzle on their ludicrous “wolf warrior” (More like Panda Pooh) diplomacy
Blacklabel
Exactly the actions of such a person. It’s toothless. there is ab expectation to not represent or take money from CCP companies either, but didn’t stop his own son.
You see what he is telling donors privately is different than the public stance.
dont need to invest in China when they can just be allowed to steal all our secrets using Chinese nationals in our military (and educational institutes and labs and)
Madverts
Fascist China's economy is about to implode. That's why fascist Pooh Bear Xi wants to start a war with Taiwan.
Galtieri tried a similar thing when his dictatorship was teetering on the brink.
The US should be supported squeezing fascist regimes. They suck.
Blacklabel
The order prohibits U.S. persons from making "certain transactions" in semiconductors and microelectronics, quantum information technologies and AI sectors and requires them to notify the Treasury Department when making such transactions.
kinda like you supposed to register as a “foreign agent” and claim and pay taxes on income received.
but when these are only enforced against your political enemies they mean nothing to anyone else other than a “supposed to do” type thing that has zero consequences if you just ignore it.
deanzaZZR
Just another short-sighted neo-con policy that will boomerang back at US industry and investors. Well, since it's World Cup time, let's call it an own goal.
Of course step two of this ever so international rules based order US presidency is to go around Europe and Asia and attempt to strong arm countries to do the same.
JeffersonLives
Both sides of the aisle have woken up to the Chinese government… The sleeping giant is finally waking up…
dagon
Western oligarchical capital has been complicit with Chinese oligarchs in off-shoring and out-sourcing of labor in a race to the bottom of acquisition; leading to the rise of disaffection and lower living standards for many in the West. And the rise of populist rhetoric there.
Blacklabel
the US has certainly created more political, economic and even proxy enemies than we can handle by now within the competence of the current people in charge.
bass4funk
I wouldn’t necessarily disagree with most of that statement entirely.
I wouldn’t call it rhetoric, I call it a much needed wake-up call.
TaiwanIsNotChina
Why not just allow investments but the moment any technical information is exchanged, it's espionage charge time.
Superlib
Even Trump fans support this. They just aren't able to articulate it.
TaiwanIsNotChina
Russia has been our enemy since 1917. It's high time you learned that.
stormcrow
Not sure who to trust less, the Russians or the Chinese. Thus, why give them means to use against us, especially should a war arise. Russia has invaded Ukraine and China threatens to do the same every day in Taiwan. They both look eerily similar to their earlier days in the 1940s and 50s. As for giving either of them technology which could be used to wage war, why give them the ammunition to blow our own heads off with? Not sure where it might be written, but there's probably some Sun Tzu quote that fits here like: Use your enemy's weapons against him. Anyway, it seems best not to arm them with technology that could end up creating anything lethal. Abraham Lincoln once said that to test a man's character, give him power. Well, we've tried to lift Russia and China since the so-called end of the Cold War, they've become economically stronger than they ever were before, and now look at them. They're both more arrogant and dangerous than they were before. Why should we empower them to make war upon others?
Eastman
another proof that USA is loosing own foothold and influence worldwide at rapid pace.
now trying to bully own companies to grow big in China.
btw what have happened to "slava Ukraine" section today?
No single word about UA advances and successes again?
lincolnman
Our daily dose of far-right hypocrisy....
They baselessly claim Joe and Hunter go easy on China because they have corrupt business ties - all a fantasy provided by a Chinese agent who played them for suckers...
https://www.nbcnews.com/politics/justice-department/gop-house-informant-indicted-allegations-was-agent-china-rcna93633
And then when Biden gets tough on China they blast him for "creating enemies"....
They flip and flop every day - giving the rest of us all a good belly laugh....
And they all go silent when you mention the decades-long millions Trump has given the CCP in clothing contracts or Ivanka's very suspicious "18 Chinese trademarks"....
https://www.voanews.com/a/china-grants-18-trademarks-in-2-months-to-trump-daughter-ivanka/4648146.html
Hypocrisy - thy name is MAGA-world....
bass4funk
No one ever said that every now and the. Biden finds a surprise in a crackerjack box. I give credit where credit is due, I think most sane people would.
bass4funk
No, bank statements don’t lie.
Not according to former business partners bank records and audio recordings.
This is a first, so good on him, I give him some dab.
Not to the nation.
https://news.yahoo.com/sen-johnson-joe-biden-lied-031844545.html
She was VP before or President??
sunfunbun
Pressuring China with technological and economic pressure is a good plan by Biden.
His alliance enforcement, by making as many friends as possible within Asia and Australia strengthening relationships does stifle the Chinese economy. A reason why going to Vietnam is a good thing, as well.
Diplomacy in democracy govt. nations is prioritized with good communication, not the USA being isolated and jingoistic. The international allies all need to realize nationalism is a conservative roadblock to better relations and understanding. Cultural understanding should be open minded and fair, with qualities of humanity being a true factor, which leads to perceptive empathy, and lesser bias promoted from nationalism.
For America not to be kissing up to the dictatorial types is refreshing, as Biden takes a stand. For awhile there, the dictator wannabe was prioritizing self interest over democracy, and not just talking gold showers in Moscow, smooching Putin's butt at the same time.
Things are changing for the better with Biden, absolutely.
theFu
US companies couldn't do this themselves for the last 20+ yrs, they were required by shareholders to seek out partners in China to give all their intellectual property.
The companies have wanted the govt to place limits, to stop them and prevent shareholders from have a reason to oust the CxO and Board members who didn't look to China for less expensive imports and manufacturing. The US Congress wasn't behaving like an adult either - no laws on this. Biden is doing the right thing. Leveling the field, at least for US companies. Now they can seek other partners for cheaper manufacturing without being forced to turn over all the company secrets like China requires.
Blacklabel
same CCP backed company the Presidents son and brother got paid by.
sunfunbun
I find it way more amusing doing nothing is the MAGA way. To allow China and Russia to be kissed up to.
wallace
There is no evidence Joe Biden received money from Ukraine or China.
"But on Wednesday, the Republicans conceded that they had yet to find evidence of a specific corrupt action Mr. Biden took in office in connection with any of the business deals his son entered into. "
https://www.nytimes.com/2023/05/10/us/politics/hunter-biden-house-republicans-report.html
RichardPearce
So, basically Biden has shut America's businesses out of the country that is dominating innovation in high tech.
He's either cutting America's nose off to spite China's face, or deluded (either by his advisors, or his age) that China isn't even more the global powerhouse on the science underlying technology than America was at it's height (when it comes to both volume in general, and 'high value' volume, the top 5 institutions producing peer reviewed scientific papers in EVERY one of the branches of science of each of the things Biden has chosen are in China. In most of them, that's true even of the top 10 institutions)
bass4funk
280 listed accomplishments debunks that noise
Well, this is a first so again, it’s a baby step, but a much needed one, so good on him for once. Let’s see if he can stay tough on China going forward.
Blacklabel
not really, I just dont consider this executive order for only "certain transactions" with a reporting requirement or some ineffective "sanctions" as being called "doing something".
There will be no consequences (for one political side) for not following the executive order so its basically looking like "(Biden family) business as usual".
Biden allies: Oh our transactions? they arent included! Years later: Oh sorry, we were supposed to REPORT these? we will do better next time!
bass4funk
No, there is more than enough evidence connecting his family to Ukraine and China, that’s an indisputable and irrefutable logged and recorded fact, however, there is no concrete evidence of connecting Biden to this, now anyone with a functioning cerebral cortex can already figure out it does, but whatever we think or feel is irrelevant, if the GOP can’t concretely prove Biden and the connection they can’t charge him with anything, but it doesn’t mean that the GOP will stop, that’s not happening as it shouldn’t, and won’t.
sunfunbun
This is untrue. In an aggregate ranking of most advanced technological countries, something subjective with no true standard, 10 sources were used and the rankings ended up with Japan, USA, South Korea and Germany top 4 with China at no. 9.
sunfunbun
Golden showers is not an accomplishment.
wallace
bass4funk
post a link to evidence that shows Joe Biden received money from Ukraine and China. Your committee could find none.
Unlike Trump who has been indicted three times, Biden has not been indicted.
lincolnman
More like Trump's hidden Chinese bank account...
https://edition.cnn.com/2020/10/20/politics/trump-china-taxes-financial-records/index.html
Thoroughly debunked - they got played by a Chinese agent - how humiliating...
What?
Was she a government employee and member of Trump's inner circle?
Why did she get 18 fast-tracked Chinese trademarks in 2018 when she was serving as his "special" advisor?
I*n October, China’s Trademark Office granted provisional approval for 16 trademarks to Ivanka Trump Marks LLC, bringing to 34 the total number of marks China has greenlighted this year, according to the office’s online database. *The new approvals cover Ivanka-branded fashion gear including sunglasses, handbags, shoes and jewelry, as well as beauty services and voting machines.
China also granted provisional approval for two “Trump” trademarks to DTTM Operations LLC, headquartered at Trump Tower on Fifth Avenue in New York. They cover branded restaurant, bar and hotel services, as well as clothing and shoes.
https://apnews.com/article/0a3283036d2f4e699da4aa3c6dd01727
Voting machines? Chinese trademarks? Explain that one...
Chabbawanga
I guess Papa Joe hasnt been able to pick up any more paychecks since Hunter has been under investigation.
Blacklabel
and Hunter testified under oath that he received CCP money. $664,000 from an energy company, to be exact.
fact. there would be no reason to censor publicly available trial testimony, unless its inconvenient.
its on topic, as the claims that he was NOT paid keep being made and not deleted as misinformation.
this is not even the 10 million in bribes that seem to be disputed, this is payments confirmed in court.
and for doing what for the CCP, exactly?